Phoenix Motor Inc. (PEVM) Earnings Call Transcript & Summary

[Audio Gap] Relations firm working with Phoenix Motor Incorporated. Thank you for joining Phoenix's Investor Day, whether in person, here in Greenville, South Carolina, or on the web through Zoom. Phoenix Motor is a leading manufacturer of heavy-duty transit buses and provider of electrification solutions for medium-duty vehicles. Phoenix trades on the NASDAQ under the ticker P-V-V (sic) [ P-E-V ]. For those of you who have been able to join us in person, today's event has given you an exclusive opportunity to tour Phoenix's recently acquired state-of-the-art transit bus manufacturing facility here in Greenville. This final segment here at the Hyatt Regency Greenville will feature presentations by members of Phoenix's management team. For those of you joining us in person, please save your questions until the Q&A session at the end. Users attending through Zoom may submit a question at any time by using the Q&A tool at the bottom of your Zoom window. Before we begin, please allow me to briefly read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management, constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. With that out of the way, it is my great pleasure to present to you our first speaker, Denton Peng, the CEO of Phoenix.

Thank you. Good afternoon. Welcome to Greenville City, South Carolina. Welcome to Phoenix EV First Analyst Investor Day. Thank you for everybody. So today, I would take this opportunity to introduce our Phoenix EV new brand. This is our new logo, Phoenix EV. Later, I will share with you the story of Phoenix EV brand new story, what we are doing. Phoenix is a commercial EV tech company. This is what we are doing today and also we want to present you today. The company have 2 brands. What's the brand difference? Why 2 brands? Let me share the story for these 2 brands one by one. One brand we call Phoenix EV. We just announced the new logo. And another one is EdisonFuture. First, let me share in the first of Phoenix EV brands. These brands, we are doing American manufacturing for American market. In -- for short, we call A for A. What is the story of this brand. Where does Phoenix EV brand come from? Let's hear that brand story from the starting. In 2003, Phoenix Motorcar founded in California. One year later, Proterra founded. In 2007, Phoenix Motorcar showcased the first commercial EV in White House. After 2 decades hard work and effort, both pioneer on the EV commercial sector combined in January 2024. These 2 brands now merged to one brand called Phoenix EV. This is why the Phoenix EV brand come from. Now we have our leading medium-duty shuttle bus and electric transit bus manufacturing in America. With this new platform, I see further EV we are going to next level. Now let me share the brand story of EdisonFuture. EdisonFuture brand is looking to do international resource partnership for international markets. We aim to do, build an international brand using international supply chain, technology partnership and a strategic investment in talent to building an international market, for short is I for I. With combination the 2 brands, EdisonFuture and then Phoenix EV, we provide commercial EV tech solution from heavy-duty, mid-duty and light-duty. What's our vision? What's the company clean tech vision for Phoenix and EdisonFuture? Our company, our aim, to integrate this with artificial intelligence and storage, new material, solar and hydrogen clean tech, autonomous driving tech, to build a clean tech and a smart tech futures. Today is an important milestone. This morning, we just announced a very, very important milestone. Let's celebration our 55 million-plus driven [indiscernible] miles. What this mean? Over 195.9 million tons of CO2 emission savings, equivalent of carbon avoid over 103.9758 acres of forest in the year in saving. This is a very important milestone. I think a lot of the detail will be shared by our colleagues. Thank you for your join today, and thank you for coming here, both online and outside. Thank you.

Thank you very much, Denton. Our next speaker, Jose Paul, the Chief Revenue Officer of Phoenix.

Good afternoon, everyone, and thanks, Denton, for that introduction. I just want to give you guys a very quick overview about the markets we operate in. To summarize, we're operating in a multibillion-dollar market, an opportunity that must be served to meet regulatory mandates. Let me repeat that. This is a multibillion-dollar market opportunity where customers don't have a choice but have to buy electric products like the ones we make. The products we make include transit buses and shuttle buses. We have a range of delivery and work trucks on the medium-duty side, and we also have the Type A school buses. All of these 3 large pockets of products have to go electric. There are mandates at a federal level, at a state level, and there is $1 billion funding for each of these segments for these different customers and fleets to go electric. On the transit bus side, you have consistent federal funding of over $1 billion annually, over $1 billion annually for transit agencies to go electric. And we're starting off at pole position here because Proterra, which is now Phoenix, had over 40% market share. And 30 -- over 30% of the largest transit bus fleets in the country were Proterra customers and now Phoenix customers. And we have the best-in-class product, and we have the capability to take care of all of these customers. On the medium-duty side, our products offer significantly better total cost of ownership as compared to the incumbent technology. And you have, again, regulatory factors, which move these vehicles, advanced clean truck regulation in California, which requires fleets to go electric starting this year. And then there are many other states which are adopting similar regulations. And again, there is a ton of state and federal funding, which covers as much as 90% of the cost of procuring a new electric vehicle from Phoenix. On the school bus side, again, you have mandates. You have over $5 billion from the EPA, which allow fleets to go electric. And you have commitments from school districts and operators across the nation of over 5,600 buses, which they are committed to buy electric in the next few years. And across these segments, when you look at each of these segments, there are only a handful of players. On the transit bus segment, there are 3 companies from whom companies can actually buy electric vehicles today, including Phoenix. On the medium-duty shuttle bus side. Again, there are 2 or 3 companies. The -- so the market is really, really ripe, and we have a strong order backlog. We have over 650 units between both our medium-duty and transit vehicle, and these include contracted orders and LOIs, which account to about $360 million in projected revenues. With the combined strength of both Phoenix and the Proterra Transit bus business, we have significant synergies to unlock. What we are allowed to do here is -- what we are capable of doing here is that we can actually integrate our engineering capabilities, our production capabilities, the best-in-class products we have and give customers a holistic solution, which allows them to go electric with one company across-the-board. And we are able to save costs significantly because we have similar products, similar supply chain, and we also have the ability to now use 2 production facilities, both in California and here in Greenville. In summary, I think, again, this is the market where customers have to buy electric. There's a ton of money available for them to go electric, and there are a few manufacturers who can provide the whole range of products, which Phoenix has, to help them go electric. And that gives us an undisputed chance to actually become one of the leading commercial vehicle manufacturers in the space. And with that, I'll hand it over to the next speaker to give you an overview about our product, our engineering operation capabilities and also other [ case ]. Thank you.

Thank you very much, Jose. And that next speaker is Mike Finnern, General Manager for Transit for Phoenix.

Thank you. Good afternoon, everybody. I'm Mike Finnern, the General Manager. A little bit of background on me. I've been with Proterra, now Phoenix, for coming up on 15 years. So I've had an opportunity to see how we have grown over time. We, in fact, started this industry back in 2010 when we delivered the very first heavy-duty, 0-emission, all-electric transit buses in the North American transit market. Let me tell you a little bit about our product, ZX5. That stands for 0-emission, long-range fifth generation. So you've heard from others that we are the market leader. We have over 40% market share, over 50 million miles traveled on our transit buses. You do that in 2 ways. You have a remarkable product. And just as importantly, if not more, you have a remarkable set of people developing that product and servicing our customers. You had a chance to see both of those in action today. Those of you that were in the factory for the tour, you had a chance to see some of the remarkable people that we have at Proterra and now Phoenix. And let me tell you a little bit more about the product. So a key advantage that we have is -- our transit bus different from our 2 competitors is we've designed this from the ground up as an EV. That allowed us to take into account certain considerations, design considerations to optimize the vehicle. So I'll talk to you a little bit about those. The body, we have an advanced composite body different from other OEMs. This is extremely strong. It's extremely lightweight. The advantages this offers, in addition, is this allows us to place certain components exactly where we want them. It's also extremely durable, meaning our customers can use this bus for likely more than the 12 years that they're obligated to, sometimes 15 or 18 years of life because of the structure that we've created. It's also extremely safe and that it's nonconductive. Okay. So it's purpose-built. One of the key elements that's beneficial, that is where we put our batteries. We have pockets underneath the floor between the axles, which we consider to be the safest place to put the batteries. They're also best from a performance standpoint because it keeps the weight down low, lowers the center of gravity. Our competition is attempting to convert traditional buses, and they have a hard time doing that. They have a hard time finding a good place to put batteries. We do not. So let's talk about the battery. Safety is important. These batteries were designed by us for our vehicle. They have a number of key traits that makes them very suitable for this application. Safety being the most important. We essentially wrote the book on heavy-duty EV safety. That starts with the batteries. We have, by far, the safest batteries in the market. They've also been demonstrated, over that 50 million miles, to have an extremely long life cycle. So we expect that many of our customers, in fact, most will not need battery replacement over 12-plus years of usage. That's because of the key elements that we've designed into our battery pack. And speaking of batteries, the energy content on board is important. Take a look at that bottom line. That's our ZX5 Max product. That bus can travel 340 miles on a single charge. That covers well over 90% of all transit routes in North America. If you were at the factory today, you had a good chance to see some of our drivetrain technology. We developed this in-house. This represents our fourth generation drivetrain that we're shipping now to our customers. It has greater performance, higher efficiency and, importantly, better reliability, lower cost of maintenance than our competition. And we own all this design. So in summary, again, let me just mention the people, right? When Phoenix acquired Proterra, what they acquired was about 300 dedicated and industry experts on producing what is our fifth-generation electric bus. And that continues now with some of the synergies that we have with Phoenix going forward. That expertise can be applied to new products as well. So our differentiation with our product and the people that we have make us an outstanding investment opportunity. And with that, I'll pass it to the next speaker. Thank you.

Thank you so much, Mike. Our next speaker, Frank Lee, Chief Technology Officer of Phoenix.

Good afternoon. I'm Frank Lee. Quickly goes to the technology and the product roadmap. First, the technology roadmap. Currently, Phoenix owns all the traditional EV technologies, including e-drive, battery, high-voltage system, composite body, vehicle communication network and the [indiscernible] firmware. And most importantly, we are very specialized in configuration and the customization of our vehicles to meet -- different customer might different usage requirements. But we won't stop here. We are looking into the future and the more advanced technology for our EVs. This include autonomous driving, smart cockpit, battery swapping, [indiscernible] data battery, fuel cell batteries. As Denton just mentioned there, we produced 3 type of vehicles. So this slide is for the heavy-duty EV roadmap. Currently, the heavy-duty transit bus, ZX5, Mike just described this vehicle, so I'm not going to repeat it. It's also [indiscernible]. So when looking for the future, we will keep improving and developing fuel-situation buses. The [indiscernible] just a very small portion of the projects we are doing. The 40% fast-charging will be enabled by advanced design, and they [ sheer ] the body and the EV modules, we enhanced our manufacturing throughput and also reduced cost. OTA stands for over the air , the software upgrading and the problem, troubleshooting and fixing remotely. We don't need to send people to decide to work on the buses, and autonomous driving and the battery swapping. Yes. The second slide is mid-duty EV. We have been producing middle-duty EV for many generations. The Gen 1 or Generation 1 was produced in 2010, and Gen 2 was in 2018. And then we had a Gen 3. In this new generation, we introduced the modular batteries and the cooling system. The cooling system enables higher performance and higher capacity, higher range for the vehicle. Before, the Gen 1, the Gen 2 was a high cooling. So the deeper cooling is an advancement of the technology. And then we have just simplified, which we upgraded the battery for safety and for reliability. The next generation Gen 4 is our main vehicle program. And at this time, we have a brand new architecture, put the battery inside the frame. As you can tell from the picture, all other generation have batteries on the sides of their frame. And putting the battery in the framework make the vehicle much safer. And also, we improved the efficiency for the vehicle. And we have both direct drive and the [indiscernible] and the swapping. I have a video to show you how the battery swapping work in a moment. The Gen 5 and Gen 6 in our pipeline for the future development. Gen 5 would be [indiscernible] architecture is going [indiscernible] development. Safe to say, standard for [ sales ] for chassis, we put the [ word ] battery itself directly into the chassis. This will increase the density and all the capacity for their energy. So [indiscernible]. And in Gen 6 with the EV pickup [ property ], we talk about this vehicle right after this video for that battery swapping technology. So let's take a little bit time to watch the video. [Presentation]

On one side is an empty battery and on other side is fully charged battery. So the system will take the empty battery off their frame and then reloaded the fully charged battery under the frame. The reason we don't have battery on the top is we want to show the details [indiscernible]. And in the switching, so he decide he couldn't have an empty battery and other side couldn't have the fully charged battery, so you keep going back and forth. I say we could move along. Okay. Let's pass it to the next speaker.

Thank you very much, Frank. Our next speaker is Joseph Xiang, Vice President for Engineering at Phoenix.

Hello. Phoenix has intensive expertise and experience in designing, research and development and integrating electric vehicles. A very good example is EdisonFuture series electric pickup truck and delivery van that we unveiled at Los Angeles Auto Show. This innovative design, eco-friendly, global resources and solar roof charging solutions will make this series outstanding in the market and also capable of advanced features. Let's take a look at the video that our EdisonFuture series pickup truck was first unveiled at Los Angeles Auto Show. [Presentation]

Thank you.

Thank you very much, Mr. Xiang. Our next speaker Lewis Liu, Chief Operating Officer of Phoenix.

Good afternoon. I think -- you have already heard about our CEO just presented about the company vision, right? So -- and also, my colleague talked about the market. We know the market is very attractive, and sometimes you have to go with the electric limited supplier. And also, you learn about the products, the product roadmap. Now so how can we make everything happen? So we're going to talk about operations, so Phoenix operation. And basically, how do we fulfill the demand? We basically has the -- here is the operation footprint information. We have West Coast and East Coast with the [indiscernible] Proterra and also the R&D centers. And we have the customer support has over the nation to support our customers, and then they're strategically located in the customer cluster. So we are able to serve our customer better. And let's talk about the operation in Transit. So if we look at here, we just merged with the -- finished merge with the Proterra Transit. And we have these 5 stages from -- with 2 parties together and first look at the transit operation. We intend to -- first, to convert whatever we have in the inventory, the pathway they've been built and is ready to go to sales, and at the same time, prepare for operation for the stabilization. So what we call that stabilization that is try to bring this back together and go out with the -- aspire to renegotiate long-term supply contracts and also to bring the system together and to be able to support our regular operations. And after that, we're going to go into the ramping up the production. So start from 1 buses per week to 2, 3 and 4 and get to the mass production. So this is what we have in mind as far as the transit operation. On the other side of the house, which is the medium-duty trucks and shuttle buses, this is how we plan out for that [ vertical ] operation. As the -- Frank Lee just mentioned, partly in that particular sector, we're focusing on the generation 4. How we're going to deliver that vehicle, function and deliver it? So we have really gone through the vehicle definition, concept design, engineering design, the fixed engineering design. And we're getting the status of between design and launch the vehicle. So this is where we're at right now. As Dr. Lee just mentioned, so we do what we can to launch it in the market to support the customer in there. So as far as the medium-duty trucks, we -- definitely, we're going to transfer some of those production into Greenville. So we try to integrate this 2 operations into one. So looking at how we're going to control or bring the cost down? So this is one example of the medium-duty with shuttle bus and trucks. So we planned the cost reduction, in general, 35% compared to Gen 3, generation 3. And then we keep bringing that down once we go into the regular stabilized production. And we actually shipped that through the standardized in the configuration of the processes of the production line and also achieve the modular design and basically doing the repack -- repinning and the supply chain integration and also the -- everything is cost-driven operations. So sometimes we call that the main operation. This is how we're able to achieve the cost reduction -- dramatic cost reduction compared to the previous generation vehicle. And in general, this is kind of common, people always say operation, so nothing fancy, right? So as Jose said and Frank just shows [ version ] some kind of [ fences ], so we are like down to the earth. We mainly focus on the integration, on the cost and lots of efficiency. This is what we're going to achieve as one team of operation of Phoenix. Now I will turn the stage to the next speaker.

Thank you very much, Lewis. And our final speaker today, Michael Yung, the Chief Financial Officer of Phoenix.

Good afternoon, everybody. Let me go over our financial guidance. So I know there's a lot of questions and everybody's trying to go back for drink so I'll make it short and sweet for everybody. Okay. This is a very exciting time for Phoenix Motors. We acquired Proterra in January. And from that, we have achieved our first quarter revenue between $8 million and $9 million. We acquired Proterra in the middle of January, and we already started running and have everything moving fast and forward. I want to thank the team for being able to achieve this. Because after the acquisition, there was a lot of work involved but everybody is focus and went to work and were able to deliver between 8 to 9 buses. This is our next quarter revenue. We projected to do between $14 million to $16 million revenue. This will be a 50% growth over the previous quarter. And we were able to achieve this on continued focus on what we needed to do, like everybody before me, credit costs, ramping up production and focus on what we needed to do to get to the next level. In summary, let me show you guys how we're going to achieve our goal and then get to the next level. Our leadership, we are the leading EV manufacturer in United States with the state-of-the-art technology, operating factory, service capability, period. We currently own 40%. We have delivered over 1,000 electric buses already. Two, best. We have the best talent and best technology, best-in-class production, experienced in EV tech team, 55-plus million proven miles, that just on the bus side, and we also have another 5 million on the medium-duty trucks, as you have seen [indiscernible]. Third, revenue. How are we going to achieve our revenue? As the show -- as couple of slide earlier, our growth is going to be driven by regulatory mandates. There are over $1 billion just in heavy-duty buses and there $5 billion in medium trucks. So between the federal funding and the customers' need due to regulation, our revenues are unlimited. And we currently have 150 customers, and the customers are growing by the day. And last, innovation -- I'm sorry, let me go back to revenue a little bit. Our revenue not just coming from the buses. Our revenue also coming from service contracts, parts. So we earn revenue not just the product itself, also contracts and parts. So our revenue, we have multiple streams of revenue. Lastly, innovations. We are the technology leader. Everything we had is proprietary. We're not using other people's. Our competitors are buying generic buses and trying to take part to fit it in versus us, is period, from ground up where we put our battery, what the technology go into. Every one of our buses has what we call OTA, over the air, means that it's constantly communicating with the cloud and sending it down to our office. So it's always been monitored. That's why our technology are live and our service member know exactly what our bus is doing. We can head off any issues. We are the leader. We are the leader and with self-driving AI just around the corner, this technology we did, and we're just getting ready in a moment. So with that said, let me hand this back to [ Kim ].

Mike, thanks a lot. The management team wants to show you a 3-minute video before we get into the Q&A session. So enjoy the video and think up questions for the Q&A session. [indiscernible] over there in the corner, and you should have a meal. Thank you. [Presentation]

And now we are moving to your questions. If you're in the audience here in Greenville and have a question, just raise your hand. I'll approach you with the microphone and you can speak to the management team. And for those of us joining by Zoom, we will use the Q&A button at the bottom of your Zoom window, type it in. We will read your question loud. So while members here in Greenville are thinking of their question, having received questions via Zoom, one of them has to do with patents [indiscernible]. What patents does Phoenix Motor have? What is it filed for its innovative features? And how are those contributing to company's competitive advantage?

Yes. I think for this EV, I think I will go in 2 portion, one is from the Proterra [indiscernible] patents. So I think later on Mike will share little bit the detail. And also that [indiscernible] for the medium-duty side. Well, with a lot of patent, we have a lot already done. So this is also another sector. So maybe first, maybe Mike can share little bit about the patent of the bus side.

Yes. On the transit bus side, I'm not sure the exact number. I think Phoenix probably acquired over 50 individual patents, somewhere in that neighborhood. And many of those, you saw in my presentation there, around the idea of the composite body, battery placement within the composite body, a lot of drivetrain technology, controls technology, battery usage and efficiency technology. So a lot of the elements that result in our bus being better than the competition are protected with intellectual property.

Thank you very much, Mike. [ Roger ], you have a question for this evening.

Yes. We was visiting the facility this morning, and it's pretty good experience for us. And I was asking what could be the production capacity for the facility here in Greenville. And I heard that you also have the facility in [indiscernible], right? And I learned from your presentations today, in future marketing demand is much higher than the multimillion dollar value, right, and it's mandatory, right? So its current production capacity is good enough for future production? Or you will have a better, bigger facility for future?

I can try to answer that question. Yes, our -- those of you that came to our factory today and what you saw today is capable of building about 220 buses per shift. So that means over 600 buses per year if we're on a 3-shift strategy. Right now, we're running one shift. The expectation is there's more than enough demand for us to increase that, and we already have plans to be able to implement a second and then a third shift. Ultimately, there's far more demand than likely that one factory can support. So I do expect that we would want to expand beyond the factory that we have now. And you're right, there's many cities around the country and around North America that are implementing mandates on when they must transition. And believe me, it's happening fast. They have to start moving fast. So today, there's somewhere in the neighborhood of 3,000 to 4,000 buses expected to be ordered, 0-emission battery electric buses ordered this year. And we expect that number to go up pretty significantly each year. So there's plenty of demand and not very many people doing it.

Just want to add to what Mike just said. On the medium-duty side, one of our strategies is to have a very distributed manufacturing facility. We -- along with the brand-new vehicles we manufacture, we also make drivetrains. And we are able to sell these drivetrains to other 3 partners who can actually electrify their vehicles in a distributed fashion. So our team currently is speaking to potential partners in New York, potential partners in Canada, in St. Louis, and these are large fleets sometimes or sometimes they are large dealers. And we are working on a program where we can actually provide them kits with which they can electrify existing vehicles. So that's another way we are trying to meet the demand.

Once again, thank you for that, [ Roger ]. We had another submitted question. It has to do with the solar panels that Neil Cavuto remarked about in Fox segment there. I saw today, we all saw, those of us who are in Greenville saw it today, on a top of that bus. So this person wants to know how does the incorporation of solar technology into Phoenix vehicles enhance sustainability and energy efficiency? I know you got on to that, but if you could just continue to elaborate.

So EdisonFuture series pickup truck have solar panel on top of the roof of the pickup truck and delivery van. So though -- we have a sister company called Solar4America, which is dedicated working on solar part of business, so we're kind of like doing cooperate work on this part of project. So basically, what we're doing right now is trying to top up our batteries by the daily uses scenario. So this way, currently, equipped with about 5 square meter of solar coverage areas on top of the vehicle as for right now.

[ Ling ], Jose, do you want to add more?

Okay. I think in addition to what [ Joseph] says, I think the key is great resilience. The biggest problem we have towards switching to electric is the amount of power which is available on the grid and the ability for each to charge, particularly individuals who are living in houses and apartments. The ability to kind of charge daily in a sustainable manner, that's still a challenge. If we are able to successfully incorporate these solar panels on to vehicles, it reduces the problem a lot. Most people who drive only 20, 30 miles would not have to charge their vehicle every night, which is when peak demand is. And that's where we are hoping this can actually make a significant change in the way people about electric.

Just to focus on what that reporter was saying, it's conceivable that on a sunny day, a person in the truck could get pretty much as much charge as needed for how long on a nice Sunday, 9 hours on the sun.

For the 20 to 25 miles, which is about 70% to 80% of the average community in the U.S., so somebody who's driving to work, park their vehicle out and finished work and getting out about 9 hours, you'll probably have a pre-charged vehicle in that point.

[indiscernible] We are continuing to get these submitted questions. Thank you very much to our online participants. We have Mike talking justifiably broadly about the in-house talent. What about partnering with other industry experts? How does Phoenix do that? And what can you get out of that?

That's something which is -- it's a very interesting question because I think if you had looked at potentially partnering with other technology suppliers 3 or 4 years back, it would have been a lot more difficult. But given the fast-changing landscape, given the amount of consolidation which is happening in this market, companies are a lot more open. We are constantly in touch with our fellow [indiscernible] in the space with potential technology players on the drivetrain side, on the battery side, on the innovative advanced driving features to see how we can incorporate all of these technology. The idea is not for 100 companies to spend $1 billion each and figure out who makes it better. The idea is for all of us to come together and make the transition to 0-emission vehicles more seamless.

During the factory tour, there is something that show to me was how custom-driven these buses are. No company, no company's buses are alike almost, correct me if I'm wrong. And some of those companies have experts and they know what they want out of their bus and you can subtly design according to the specifications, right?

That is correct, yes. And Mike, if you want to elaborate on -- I think Mike can talk a lot more eloquently about how we address all the different challenges and the different customization, which we require -- our customers require on the transit bus side.

You covered it well.

Okay. Yes. The idea is -- I mean, it is something which -- it's almost like building a plane. Every single fleet out there has different specifications. Our engineering team is attune to take those requirements and convert them into a meaningful workable production plan where we are able to produce these vehicles, which are customized, and also service them in the field. And that's been one of the -- some people look at it as a challenge, but I think we have made it our strength. And that's what differentiates us.

Speaking of differentiation, this person writes in -- and I know we have been covering how we're different. But let's go in more detail. This person wants to know how Phoenix differentiated its electrification solutions from competitors in the commercial vehicle industry. Just more detail on that subject please.

Sure. I think on the transit bus side, right from the get-go, we are not looking at electrifying existing CNG or a diesel vehicle. It's a purpose-built product, and there aren't any other like that. We have Mike talked about it. We have a composite body. We have purpose-built design where the batteries go and it is all focused on having the most efficient vehicle out there, and that's been a huge differentiator for us. On the medium-duty side, our approach has been -- we've been very cognizant of the fact that it's a very nascent market. And the goal has been to kind of provide electrification services in a way where fleets can get vehicles, which are very similar to the existing vehicles. So what we do is we actually electrify existing Ford chassis. So we use all the good parts, about a whole E-450 chassis, and we electrify that. And we're able to provide a wide range of solutions on that one chassis. Going forward as the market matures and most volume grows, as Dr. Frank Lee mentioned here, we would have our fifth generation product, which will be a ground-up product for the utility vehicles. But I think those 2 specific approaches on how we electrify each of these markets is what really differentiates us. And of course the amount of talent we have. Mike talked about 300 -- close to 300 people who have pioneered this industry. And they have the most experience, and they have the best relationships. And they know how to innovate in a product with the product [ sectors ]. And I don't think any other company has that amount of capability. And that, I think, going to -- when it comes to the bottom of it, I mean, it's really the people who make all the difference here.

Thank you very much, Jose. A participant online really like that battery swapping technology and wants to know, is it patent-protected.

It is not as yet. You talked about partnering with other companies. The -- we have developed this and we have made this work for our product by partnering with other companies. Our goal again is not to have a long list of patents, but is to kind of provide solutions in a way which is workable for customers without -- by being very efficient with the funds we have. So it's not patent-protected, but it's a [ close ] of its kind in the U.S. market.

Another participant wants to know about the design of the bodies, that weight-saving feature. He just wasn't clear enough on it. And could someone from the management team provide more details on the advantages, the strengths of that design?

Sure. Mike?

Sure. The composite body saves about 2,500 pounds over a traditional structure. So what that does is it allows for us to offset some of the additional weight from batteries. Batteries are relatively heavy, so to offset that weight.

Thank you very much, Mike. Okay. Again, here's your opportunity to speak to the management team. Just raise your hand, and I'll give you the microphone. Otherwise -- all right. Once again, we're going to invite you to take a meal. Right over there in the corner is a buffet, some delicious food right there. You'd love it. And please, feel free to mingle with management. But before we go, this is for our viewers online, let me give you some more ways to get more information about Phoenix. You can call us, RedChip, at 1 (800) Red-Chip. That's 1 (800) 733-2447 or send us email at [email protected]. Please also visit RedChip's Investor Information page created especially for Phoenix is redchip.com/stocks/pev. There, you can sign up for investor alerts. You can download the deck. You can download our fact sheet on the company, very good page, well worth the visit. And of course, you can get an archive version of today's webinar, which anything you want to go over. Just go to redchip.com/events. That's redchip.com/events and scroll down to the archives. And that's it. Thank you for our in-person participants today and for our online viewers. Thank you very much from Phoenix Motor.